CBR
search

What value will Jamaica’s port add to shipping conglomerate’s US$2 billion fundraising plans?

French shipping giant CMA CGM is planning to sell some of its worldwide assets, including that in Jamaica, to cover expansion of its global shipping assets.

CMA CGM is expected to sell its stake in Jamaica’s Kingston Terminal (Photo: reuters.com)

The move is being done to assist CMA raise US$2 billion to finance its takeover of CEVA Logistics, which it purchased earlier this year, according to Reuters.

However, what is not clear is the dollar value of CMA CGM holdings at the Kingston Terminal, which is part of the company’s plan to sell its stake in 10 port to China Merchants Port Holdings Company.

“French container-ship operator CMA CGM SA is looking to raise as much as US$1 billion by selling port assets of Singapore’s Neptune Orient Lines, including some in the US, to cut its debt …”

– Wall Street Journal

CMA CGM entered into a deal with the Port Authority of Jamaica (PAJ) in the form of a long-term concession with Kingston Freeport Terminal Limited in 2015.

A press release from the company, shared on Reuters news service noted that, “CMA CGM, which acquired Swiss-based CEVA this year to expand into the land logistics area, said it would raise US$968 million by selling stakes in port terminals to the Terminal Link venture, in which it holds a 51 per cent stake and China Merchants 49 per cent. French-based CMA CGM also plans to raise US$860 million from the sale and leaseback of vessels.”

Additionally, the Wall Street Journal reported that, “French container-ship operator CMA CGM SA is looking to raise as much as US$1 billion by selling port assets of Singapore’s Neptune Orient Lines, including some in the US, to cut its debt, people familiar with the matter said Tuesday. CMA CGM, the world’s third-largest shipping line by capacity, recently concluded its acquisition of NOL, paying US$2.4 billion in cash for the container firm. Including NOL’s debt, the deal was valued at about US$5 billion. As of June 30, CMA CGM’s adjusted net debt stood at $8.2 billion.”

The PAJ and the Ministry of Transport, Works and Housing are expected to make a comment on the impending sale in the coming weeks.

CMA CGM posted profit of US$45 million for its third quarter. (Photo: reuters.com)

CMA posted profit of US$45 million for its third quarter ended, an increase of 25.8 per cent over the same period last year. The company said a five per cent increase in volumes carried and a performance improvement plan accounted for the showing.

Net profit year-to-date stands at US$158.9 million, an improvement over the US$103.1 million made during the same period last year.